by Sara Winand, RN, Director of Medical Management
The Mental Health Parity and Addiction Equity Act of 2008, which went into effect January 1, 2010 has changed the way Mental Health and Substance Use Disorders are viewed and paid by employer groups.
Cumulatively, a series of changes and trends have been having a serious impact on our mutual abilities to underwrite a competitive policy that works to support our employer groups’ businesses – not cripple their budgets.
The impact of Health Care Reform is extensive. The act mandates:
- – No annual dollar limits
- – No lifetime maximums
- – No annual limits on number of days or visits
- – Coverage extended to dependents up to age 26
We are now seeing covered individuals seek treatment for Substance Abuse more and more frequently, with costs for treatment ranging from $150,000 to $300,000 – for a single year.
In fact, in the six years since the Act passed, the group for which we’ve seen a growing trend in high claims is 16- to 26-year-olds! This age group is the highest risk category for relapse and ongoing charges, and has become a financial liability to plans and excess carriers across the U.S.
Why? Here are a few trends that may answer that question:
- – Mental Health (which includes Substance Use Disorder) is now a covered benefit just like any other illness.
- – Although many facilities have been out of network in the past, we are seeing a trend for now in-network claims for Substance Use.
- – Facilities are now outsourcing labs, so urine drug screens are billed separately and frequently (many times daily) and often cost as much as
the facilities’ daily charges.
- – Facilities are billing incrementally, meaning these charges are flying under the radar and are not readily detected as a potential LARGE claim.
- – Many plans only require precertification for inpatient acute care and can go unmonitored when the claimant steps down to Residential, Partial
Hospitalization, IOP (Intensive Outpatient) then to OP.
- – Facilities are typically located out of state; many resemble a resort: They are lined with palm trees, feature seascape landscaping, and offer
4-star cuisine, recreation and exercise programs which oftentimes include yoga, horseback riding, spa therapy, and more.
- – Many websites feature logos of PPO networks but are not actually affiliated with these or any network.
As partners invested in protecting our employer groups’ interests, it’s important that we do what we can to stop the bleeding. Try asking the following questions when you see claims related to Mental Health or Substance Use Disorder treatment:
- 1.Is this person’s treatment court-ordered?
- 2.How is this treatment being certified for medical necessity?
- 3.Is the facility licensed for the diagnosis and services it is billing for?
- 4.Does the facility bill for IOP more than five days a week?
- 5.Should I have claims and the medical records sent out for review before paying the claim and submitting to stop-loss? This is highly recommended.
With the lethal cocktail of health care reform, lack of financial limits, and mandatory coverage to age 26, it is anticipated that Mental Health and Substance Use Disorder claims will only become more prevalent.
Please contact us at firstname.lastname@example.org and let’s work together to try to reduce the financial risk these trends can pose to our employer groups.